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How to be really innovative in the hospitality and service business?

27 Nov 2013 - {{hitsCtrl.values.hits}}

Oh no, not another article on innovation! Haven’t we heard enough from everyone who claims to be someone, when on stage? Please also don’t feed us another dose of anecdotes extolling how Southwest Airlines, Ritz Carlton or Walt Disney excel at it! No, I won’t. Instead, let me continue from where I left off in my previous article.
A search of annual and quarterly reports filed with the US Securities and Exchange Commission shows companies mentioned some form of the word “innovation” 33,528 times last year, which was a 64 percent increase from five years before that. More than 250 books with “innovation” in the title have been published in the last three months, most of them dealing with business, according to a search of Amazon.com.

Businesses throw around the term to show they’re on the cutting edge of everything from technology and medicine to snacks and cosmetics. Companies are touting chief innovation officers, innovation teams, innovation strategies and even innovation days. But that doesn’t mean the

companies are actually doing any innovating. Instead they are using the word to convey monumental change when the progress they’re describing is quite ordinary.

Like the once ubiquitous buzzwords “synergy” and “optimization,” innovation is in danger of becoming a cliché—if it isn’t one already. The innovation trend has given birth to an attendant consulting industry, and Fortune 100 companies pay innovation consultants $300,000 to $1 million for work on a single project. In addition, four in 10 executives say their company now has a chief innovation officer, according to a recent study of the phenomenon released last month. Most of the executives conceded their companies still don’t have a clear innovation strategy to support the role. Jeff Semenchuk, who was named Hyatt Hotels Corp.’s first chief innovation officer in August, says there is ‘nothing fluffy’ about his job. The hotel chain recently interviewed hundreds of guests and concluded that “we’re all kind of stuck in the past,” he says of the industry. He oversees experimental initiatives at eight newly designated “lab” hotels around the world.

Challenges to service innovation
Hotels and service organisations, despite recognising service innovations as being essential, are simply not doing enough to discover innovative ways to bring on that ‘wow’ factor –let alone ways to serve guests more effectively and efficiently. Those that attempt to do so, face particular challenges in their efforts to innovate.
One of the biggest frustrations identified is that service innovations are easily imitated. How true…Recall the ‘Breakfast anytime’ offer that one hotel came up with – only to have several hotels scrambling to boast likewise? Another challenge to service innovation is the real-time nature of introducing new services.

Unlike product testing in a laboratory or sample tests done with volunteers, at best a new service must be pilot tested with real guests in a real hotel. The problem with this is that one cannot be pilot testing all the time and recalling ones that don’t work whilst running a hotel. Another mistake is to succumb to the pressure of competition by introducing technological innovations for the sake of appearing innovative and progressive. It would seem that the lodging industry is haphazardly implementing the latest technological advances in a dangerous game of ‘one-upmanship’, without consideration of guests’ needs and abilities to cope with such technology. Why else would hotels be engaged by spending lavishly in a “technological arms race”, instead of focusing on trouble with Internet access and the age-old problems of poor television picture quality and over-priced room charges that is leaving frustrated guests in its wake?

A key takeaway that resonates well with innovation is to remember that innovation is all well and good and necessary, as long as it only enhances your core competency and deliverable. Once you start messing with that core deliverable, then you run the risk of compromising the reasons that your customers are working with you to begin with. Imagine the mobile phone of tomorrow having amazing features that challenge belief but is no longer small, slim or light weight – instead, is extremely unwieldy to be hand-held or carried around with ease. Wouldn’t it lose its core feature? It most definitely will. Any innovation that compromises the “hand-iness’” of the mobile phone...is self-defeating.

Let everyone know how and why ?
Another troubling aspect is when hoteliers believe that ‘to innovate is to cut costs’: which sadly is, diametrically opposed to what innovation can do - namely improve service. When innovations are meant to also cut costs, for instance, both employees and guests may need an explanation of the innovation. Regardless of how the innovation is implemented, it must be embraced by staff and management, and guests must see the changes as valuable.

Take the example of self-service kiosks in some hotel lobbies. Employees regard these with suspicion and guests are slow to adopt kiosks in some cases. The experience of a reputed five-star business hotel in the US is worth recalling. This hotel was the preferred hotel for the four biggest business conglomerates in that state and enjoyed a virtual monopoly of their patronage, making it the number one hotel in that city. The hotel was one of the first in the U.S. lodging industry to introduce check-in kiosks in its lobby whilst at the same time ‘downsizing’ front desk staff.

Soon, queues began to form at these kiosks every mid-morning and pandemonium reigned. What the hotel failed to heed was that the pattern of arrival activity by its business travellers was at its ‘peak’ around mid-morning and the number of available kiosks simply couldn’t cope with the ‘arrivals’ demand. Installing more kiosks was not a solution either. Soon, business travellers who usually stayed in this particular hotel were booking elsewhere! The hotel management was jolted into action when one of its four top corporate accounts completely moved to the competition – virtually overnight. How did this happen? This hotel introduced self service kiosks to reduce costs by embracing technology to replace staff without studying the full impact of its actions. It failed to observe or measure actual guest responses to the innovation before implementation and it had also avoided discussing the change with staff.

The moral of that experience (and of other technological innovations) is that technology needs to be balanced with personal service innovations. Nowadays, hotels use customer choice modeling, a formal process that allows customers to choose among packages of services. In the case of self service kiosks, provide it to the traveller who is tech savvy, whilst also having staff in the lobby to assist and/or check-in guests who continue to appreciate the human interaction.

Despite the likelihood that innovations will be imitated, keep looking for new ways to do things, or better ways to do existing tasks. Why not replace the run-of-the-mill ‘meet and greet’ service offering at the airport by having iPad-toting airport reps meet guests at the airport and check them in? Service innovation is most successful when it is undertaken as an extension of a strong culture that focuses on guests needs. On the flipside, innovation is most successful in service operations that actively seek the support of employees and beyond that encourages them to participate in a culture of innovation.

(Shafeek Wahab has an extensive background in Hospitality Management spanning over 30 years. He has held key managerial responsibilities in internationally renowned hotel chains, both locally and abroad, including his last held position as Head of Branding for a leading Hotel Group in Sri Lanka. Now focusing on corporate education, training, consulting and coaching he can be contacted on [email protected])

Features

How to be really innovative in the hospitality and service business?

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